NEW DELHI: U.S. President Donald Trump announced that the U.S. will impose reciprocal tariffs on India starting April 2 while addressing a joint session of the U.S. Congress today.
“Countries like the European Union, China, Brazil, India, Mexico, and Canada charge us very high tariffs compared to what we charge them. Itโs unfair,” Trump said.
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Despite concerns over tariffs, a State Bank of India (SBI) research report suggests that the impact on Indian exports will be small.
The report states: “Even if the U.S. imposes tariffs of 15-20%, the impact on Indian exports will be limited to 3-3.5%. This can be managed as India has diversified its export markets, focused on value-added products, and developed new trade routes.”
The report highlights that trade between India and the U.S. has been growing over the years. Indiaโs trade surplus with the U.S. increased from $7 billion in 2000 to $45.7 billion in 2024.
The U.S. remains Indiaโs top export destination, accounting for 17.7% of India’s total exports in FY24.
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Trump has often called India a “tariff king” and criticized high taxes on U.S. goods. “India charges us 100% tariffs.
The system is not fair to the U.S., it never was. On April 2, reciprocal tariffs kick in. Whatever they tax us, we will tax them. If they use barriers to keep us out of their market, we will do the same,” he said.
Following this, the White House released a fact sheet stating that India’s average tariff on agricultural goods is 39%, while the U.S. tariff is only 5%. India also imposes a 100% tariff on U.S. motorcycles, while the U.S. charges just 2.4% on Indian motorcycles.
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However, India has been working to improve trade relations. It has lowered tariffs on bourbon whiskey, motorcycles, ICT products, and metals and has allowed more access to U.S. agricultural goods like alfalfa hay and duck meat.
The SBI report highlights that India is well-prepared for such challenges. It is expanding trade routes through the Middle East, strengthening supply chains, and increasing trade with Europe, Africa, and Southeast Asia to ensure continued export growth.
India’s shift toward high-value sectors like pharmaceuticals, electronics, and renewable energy further enhances its economic stability.
Instead of relying on raw material exports, India is now focusing on finished goods and high-end services, strengthening its position in global supply chains.
Manufacturing hubs across the country are being modernized to support this transition.
Additionally, a new international trade route is being planned, passing through the UAE, Saudi Arabia, Jordan, Israel, and Italy before reaching the U.S. This will help Indian businesses expand globally and reduce trade risks.
The SBI report makes it clear: “Bilateral ties go beyond tariffs. Both nations are working towards mutual growth and prosperity.”
